How To Negotiate the Improvement Allowance
The build process of an commercial real estate development can always be a very tedious task. maintaining control of this process will greatly allow you to enjoy your new Monroe office space than if you were to let the potential development to becoming wildly unstructured. Adding in a tenant improvement allowance inside your lease agreement is a very key component of the leasing process. When looking to redo the space that you have in your new office, there are two ways that the improvement allowances could be completed:
1). Turn Key Build-Out
2). Stated Dollar Amount
In the turn key build-out, the landlord will take on all of the monetary items necessary for the build out. The Monroe office expenses would not be your responsibility and you will be just an onlooker during the construction process. The stated dollar amount option though will allow the landlord to state that they will pay x amount of dollars in order for the construction to occur. This normally is a set number to cover any architectural and engineering fee that may be incurred during the daunting process. During the lease agreement though, many tenant representatives will strive to opt for a turn key build-out as that would limit any, if not all, of the out of pocket expenses for the new tenant. Saving on the bottom line of the Monroe Office is obviously top priority for the tenant representative as no one wants to pay any additional money for the space that is being rented.
There are a good amount of issues with the turn-key approach though as their may be additional areas of the renovation that are cut due to higher cost. The tenant does not have much say in the turn-key approach and may have a good amount of their needs left unsatisfied. It is a give an take at the end of the day as you can save a large sum of money, but at the same time you may not get precisely what it is that you want.
Two major factors that many Monroe office representatives may want to keep in the back of their mind are:
1). Maintain Quality Control of the entire Build-Out Process
2). Look for the best fit for your construction as the bidding process begins
First and foremost, you must maintain the build-out process to remain on schedule, within budget and completed by a time that you find ideal. Working a tenant improvement in to the lease is not the easiest of tasks, and having the right tenant representative can make all of the difference. Before you sign the lease though, make sure that your potential needs are met as far as construction occurs, otherwise you will be looking at a long office contract that may not be negotiable.